Willingness or Market Power: What Induces Tenants to Pay for Energy Efficient Housing?
Carolin Pommeranz and
Bertram Ingolf Steininger
ERES from European Real Estate Society (ERES)
In this study, we analyze whether additional payments for energy efficiency are induced by either tenants’ willingness to pay, the market power of landlords, or both. With a German housing dataset from 2011 to 2016, we identify price discrimination for the energy performance certificate using hedonic regressions in a single and double sort setting. Results indicate that a high willingness to pay -– indicated by purchasing power and environmental awareness -– leads to price discrimination effects of 7-8%. These potential extra profits can stimulate investments in energy-based refurbishments by landlords. However, additional market power of landlords –- indicated by housing market conditions –- does not amplify these discrimination effects and is therefore not exploited against tenants.
Keywords: Energy Efficiency; energy performance certificates; green housing; price discrimination (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene, nep-reg and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2018_134
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